Safe Haven Appeal of Gold Back in Focus

Early on Wednesday, gold continues to make gains, rising for the third straight day even as the market sentiment received a boost over expectations of the US government getting closer to announcing fiscal stimulus measures. At the time of writing, GOLD is trading at a little above $1,612.

During the previous trading session, gold prices gained over 3% of their value over rising worries about the rampant spread of the coronavirus even as several countries enforced stricter lockdown measures to contain the number of cases. Meanwhile, the mood in the global markets received a bit of a boost on Tuesday, a day after the Fed announced more liquidity boosting measures.

In addition, senior lawmakers across parties expressed hope that the Trump administration’s fiscal stimulus package worth almost $2 trillion could soon gain approval and be announced. Gold prices, however, remain supported as the safe haven appeal of the metal remains in focus after the WHO warned that New York could turn into the next epicenter of coronavirus in the world.

In the previous session, PMI readings across several countries offered some insight into the extent of the slowdown being caused by the pandemic, giving gold yet another reason to climb higher. Expectations that the global economy could slip into recession remain high amid the lockdowns and travel restrictions that have been imposed by multiple governments across the world.